President Clinton's call for a moratorium on new Internet taxes won rave reviews from an audience of high-tech executives yesterday, but it puts him at odds with many of the nation's governors and traditional retailers.

At a speech in San Francisco yesterday, Clinton endorsed the Internet Tax Freedom Act, which would block states or cities from imposing new taxes on goods and services sold online.

Silicon Valley executives have been lobbying Clinton for months to back the bipartisan bill, which would let states tax Internet commerce only if the seller has a "physical presence" in the buyer's state -- the same policy that applies to mail-order sales.

"We've been pushing for this for nine months," said Eric Schmidt, chief executive of Novell in Orem, Utah. "This is a big deal. We're talking about billions of dollars in taxes not happening for high tech. Everyone in the industry is happy."

The president said state and local governments could continue to apply existing taxes to electronic commerce "as long as there is no discrimination between an Internet transaction and a traditional one."

During the moratorium, state, local and federal officials and the private sector would come up with a more uniform approach to taxing Internet commerce.

Clinton's stance conflicts with that of the National Governors' Association. On Tuesday, the group overwhelmingly approved a resolution that urges Congress to pass legislation allowing states to collect taxes on Internet sales -- even if the seller does not have a physical presence, such as a retail store, in the buyer's state.

The governors' resolution also would create a single nationwide tax rate for electronic commerce.

Some governors are worried that Internet trade could erode their tax base by draining business away from local merchants. California's Pete Wilson is one of only two governors who oppose the resolution.

The stakes are enormous: Business-to- business electronic transactions will amount to a $300 billion business by the year 2002, according to a forthcoming White House study.

"There should be no special breaks for the Internet, but we can't allow unfair taxation to weigh it down and stunt the development of the most promising new economic opportunity in decades," Clinton told 750 executives at the BancAmerica Robertson Stephens technology conference at the Ritz-Carlton yesterday.

Clinton said he would ask Treasury Secretary Robert Rubin to seek an online-tax moratorium internationally.

"The next big step in our economic transformation it seems to me is the full development of this remarkable device, and the electronic commerce it makes possible," he said. "We need to widen the circle of opportunity."

Sandy Robertson, chairman of BancAmerica Robertson Stephens, thanked the president with a plaque bearing his computer user name ("Bill Clinton") and his password ("Buddy").

Others weren't so grateful.

Clinton's call for a Net-tax moratorium "certainly discriminates against local business," said Neal Sofman, co-owner of A Clean Well-Lighted Place, a Van Ness Avenue bookstore.

"As we undermine local business, we wind up having only large, corporate distribution networks," said Sofman, whose company recently closed two other bookstores.

Clinton yesterday praised Amazon.com, an online-only bookstore that sold 6.5 million books in 1997. But online booksellers, along with national chains, are a big threat to independent bookstores.

Even book shops that have Web sites, such as City Lights Bookstore in North Beach, believe that the vast majority of their sales will always be made in person.

Tax-free status for Internet sales is "definitely an unfair advantage," said Richard Berman, manager of City Lights.

"We certainly can't compete with Amazon and the other Web sites," Berman said.

Bill Burnham, an analyst with Piper Jaffray in Minneapolis, is skeptical that the tax moratorium will last indefinitely, especially as online commerce grows.

"The government wants to get its hand in every pot," he said. "It's not going to become magnanimous all of a sudden and stop making everyone pay taxes."

At the same time, Burnham doesn't expect Net purchases to ever be subjected to the confusing jumble of state tax laws. "That would risk tax anarchy, and a lot of firms getting into legal trouble because they couldn't follow each state's regulations," he said.

MEETING WITH CLINTON

Before his 20-minute speech yesterday, President Clinton met with a small group of Bay Area high-tech executives for a half-hour at the Ritz Carlton to discuss Internet taxation, education, the International Monetary Fund, encryption and research and development funding. The executives included:

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